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Saturday, April 7, 2018

What is foreign funding

Union Minister of State for Home Kiren Rijiju disclosed in Rajya Sabha on Wednesday that the government was taking all legal action against those NGOs and institutions which are not complying with the provisions of Foreign Contribution Regulation Act (FCRA), 2010.During the period 2015-17, hundreds of NGOs were barred from accessing foreign funding. 


Across the country since 2012, registrations of more than 18,500 NGOs and institutions have been cancelled for violating laws. As defined in Section 2(1)(h) of FCRA, 2010, "foreign contribution" means the donation, delivery or transfer made by any foreign source." 

Foreign contribution excludes earnings from foreign client(s) by a person in lieu of goods sold or services rendered by it as this is a transaction of commercial nature. A 'person', as defined in Section 2(1)(m) with the exclusion of those mentioned in Section 3 of FCRA, 2010, having a definite cultural, economic, educational, religious or social programme can receive foreign contribution after it obtains the prior permission of the Central Government. 


NGOs cannot use the foreign contributions for investment in Mutual Funds and other speculative investments. What are the eligibility criteria for grant of registration? For grant of registration under FCRA, 2010, the association should: (i) be registered under the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or section 25 of the Companies Act, 1956 etc; (ii) normally be in existence for at least three years and has undertaken reasonable activity in its chosen field for the benefit of the society for which the foreign contribution is proposed to be utilised. 


Section 18(1) of FCRA states, "Every person who has been granted a certificate or given prior approval under this Act shall give, within such time and in such manner as may be prescribed, an intimation to the Central government, and such other authority as may be specified by the Central government, as to the amount of each foreign contribution received by it, the source from which and the manner in which such foreign contribution was received, and the purposes for which, and the manner in which such foreign contribution was utilised by him." 


More details can be had at http://mha1.nic.in/pdfs/ForeigD-ForeigD-FCRA_FAQs.pdf  

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